News / Forwarders call for surcharging regulation as trust in carriers dissipates

Cargo interests will remain exposed to price gouging and indiscriminate surcharging without the introduction of “effective regulation”, forwarders have warned, amid worsening relations with carriers.

As reported by The Loadstar yesterday, a number of forwarders have slammed the latest wave of carrier-imposed surcharges, with purported “war-risk” add-ons attracting the bulk of disdain.

The forwarders The Loadstar spoke with said: “There’s currently no effective regulatory or industry framework governing application of these surcharges, which leaves cargo interests exposed to unilateral pricing decisions.”

However, they urged the industry not to go into a combative mood, stressing that “what is required is not confrontation”; instead calling for transparency from carriers when it comes to surcharges.

The forwarders said carriers needed to provide a “clear linkage between surcharge levels and verifiable cost components”, noting that without proving that they were also dealing with enhanced costs, “the legitimacy of charges will continue to be questioned”.

While it was possible to resolve this without a need for regulatory intervention, successive supply chain upsets, accompanied by a perception of carrier malpractice, has eroded forwarder trust of carriers almost completely.

Consequently, there is growing interest among forwarders to see carriers face an international regulatory framework to hobble their capacity to “indiscriminately and unilaterally” slap surcharges on cargo.

“We are observing layering effects – fuel surcharges, congestion surcharges, and now war-risk surcharges – without clarity on whether the same underlying disruption is being priced multiple times,” the forwarders said.

“And, unlike the fuel adjustments – which at least have a reference framework – war-risk surcharges are opaque. There is no benchmark, no formula, and no audit trail linking the charge to actual cost drivers.”

Among carriers to have implemented war-risk surcharges, albeit some using a different name, are CMA CGM, Hapag-Lloyd, Maersk, MSC, and ONE, all within a few days of each other at the start of March for Gulf and Middle East destined shipments.

Pricing is dependent on size and box type, with standard teu units subject to charges ranging from $1,200 (ONE) to $2,000 (CMA CGM); pricing per 40ft jumps beyond $3,000, and CMA CGM announced reefers would face a $4,000 charge.